Adam Smith and Alexis de Tocqueville: Liberty and Self-Interest in Economics and Politics , Papers of Introduction to Sociology

Download Adam Smith and Alexis de Tocqueville: Liberty and Self-Interest in Economics and Politics and more Papers Introduction to Sociology in PDF only on Docsity! Student: JERONIMO O. MUNIZ Professor Mustafa Emirbayer 1st Review Essay Intermediate Sociology Theory – SOC 773 What do Adam Smith and Alexis de Tocqueville Have to Say About Liberty and Self-interested Individuals? Adam Smith and Alexis de Tocqueville agree that liberty is one of the most important principles needed to any society to achieve prosperity and well being. The difference between these authors is how they theorize and conceptualize the role of freedom in society. Adam Smith pays attention to liberty as a form of individual freedom driven by self-interests, which he considered essential to promote economic prosperity. He believed that when individuals act according to their own interests they would obtain the best of the economy and promote prosperity of society. De Tocqueville, on the other hand, was concerned with liberty in a more political sense and in the ways that society should be organized to promote political and civil liberty. In 1776, Adam Smith wrote The Wealth of Nations, where he suggested the presence of an invisible hand. According to him, the collective status of a population is a consequence of selfish individual acts. He wrote: “(…) [every individual] neither intends to promote the public interest, nor knows how much he is promoting it…he intends only his own security… his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. (…) By pursuing his own interests he frequently promotes that of the society more effectually than when he really intends to promote it.” (SMITH, 1776: 32) Thus, the invisible hand would represent some kind of “invisible strength”, which would tend to transform or conduct selfish individual actions to a sort of macro dynamic equilibrium characterized by competition and the best performance of the economy. Smith states that through the supply of labor – which he considers as an inviolable right and the foundation of all other property – individuals are capable of aggregate value to raw materials and define prices according to the dynamics of the labor market. More specifically, as more people begin to work to supply the demand for labor, production increases, wages decrease and prices start to decline. The equilibrium in the market is given, therefore, by a scenario of maximum production generated by individuals who seek only their own personal gains in the form of wages. Therefore, when the government does not interfere in the natural behavior of the market, individual selfish actions lead to a point of equilibrium where the economy works in the best way that it cans. Smith believed that the government should not intervene in economic issues. The regulation of prices, minimum wages and taxes should be determined by the natural flow of the market. According to Smith, the government should intervene only in spheres where individual egoistic actions are incapable of assuring the societal well being. In his words: “According to the system of natural liberty, the sovereign [government] has only three duties: protecting the society,…administration of justice; and the duty of erecting and maintaining public works and certain public institutions which it can never be for the interest of any individual, or small number of individuals (…)” (SMITH, 1776: 274) Alexis de Tocqueville agrees with Smith that people should be allowed to take care of their own affairs because they are closer to them. Nevertheless, he believes that the power of 2 governments, at least in the political sphere, should not be limited, and market activities should not be left for the invisible hand. In his words, “Thought private interest… is the driving force behind most of men’s actions, it does not regulate them all” (DE TOCQUEVILLE, 2000: 512). For Alexis de Tocqueville, the main role of the central government is to assure the legitimacy of democracy. When people collectively elect a group of representatives to make laws and to represent the will of the majority, they are establishing a way to represent their own interests. In this way, they give great power to the government, but at the same time prevent individuals of having high personal gains. In addition, de Tocqueville extends his analysis suggesting that the authority of local governments should be restrained by the laws prevailing in society. According to him, this would be one way to avoid the spring of despotic governments and guarantee the continuation of democracy. When Tocqueville came to the United States to write Democracy in America, in 1831, he noticed that the principles of liberty and equality were present in the country. Particularly, he noticed that under extreme circumstances these two principles could be equal: “Let us suppose that all the citizens take a part in the government and that each of them has an equal right to do so. (…) Then, no man is different from his fellows, and nobody can wield tyrannical power; men will be perfectly free because they are entirely equal, and they will be perfectly equal because they are entirely free.” (DE TOCQUEVILLE, 2000: 503) De Tocqueville believed in equality as one of the main pillars of a democratic state. Nevertheless, he was also afraid that, under equal conditions, individuality would arise and people would become selfish and worried only about their own interests1. According to him, under these conditions, there would be space for the establishment of despotic governments and the collapse of democracy. He affirms that equality leads to isolation, and isolation is the main ingredient that despotism requires. In other words, Tocqueville argues that individualism (as opposed to egoism) is a problem under democratic regimes that spreads in proportion with the equality of conditions. One of Tocqueville’s main concerns was to understand then how the principle of liberty could exist in a democracy, as opposed to an aristocracy. He suggested that the best way to sustain a democracy was to avoid individualization, and to do so, the best option was to get involved in local affairs that bring citizens out of their isolation. Forming groups and political and civil associations (i.e., NGOs, sportive clubs, professional associations) citizens are constantly reminded that they live in society, avoiding therefore the dangers of tyranny in a democracy. In his words: “Citizens who are bound to take part in public affairs must turn from the private interests and occasionally take a look at something other than themselves. As soon as common affairs are treated in common, each man notices that he is not as independent of his fellows as he used to suppose and that get their help he must offer his aid to them” (DE TOCQUEVILLE, 2000: 510) After discussing how isolation and individualization can be prevented to avoid despotism, Tocqueville’s question turns to be why citizens would like to form associations. Without denying individual rights, he follows Adam Smith’s example and admits that the American citizens have 1 In aristocracies, individualization would hardly occur because there is a link between citizens of different classes that is enforced by obligations between the parts (i.e., the patronal relation between employers and employees).